Brussels, 05/05/2006 (Agence Europe) - The ECOFIN Council adopted conclusions on Friday 5 May on cross-border consolidation, convergence of controls and the European Commission's White Paper on financial services policy by 2010 (see EUROPE 9082). It broadly supported the European Commission's strategy to have a pause in the legislative process to focus on implementation of the Financial Services Action Plan (FSAP) and launch targetted initiatives in areas like retail financial services. The ministers welcomed the forthcoming amendment of prudential surveillance rules for certain directives, and welcomed the European Commission's plan to increase consolidation in the financial sector with the publication before the end of the year of updated prudential surveillance rules (Directive 2000/12/EC) for banking, markets in financial instruments (the MiFid Directive 2004/39/EC) and insurance. The Council backs the Commission's plan to use the powers it has under the treaties (the power to launch infringement proceedings) to ensure the application of fundamental freedoms under the treaty, including in the field of competition and state aid. It instructed the European Commission to set out tax obstacles to cross-border mergers and acquisitions, along with ways of overcoming these barriers. On control of financial markets, the ministers back the European Commission, which recommends evolution (rather than revolution) of rules and practices. There is no consensus among ministers about establishing an EU-level surveillance authority. Karl-Heinz Grasser said the ECOFIN's approach was to improve cooperation and harmonisation of the rules with responsibility remaining at national level.
In terms of improving financial surveillance in the EU, the Council called on the Committee of European Securities Regulators (CESR), the Committee of European Banking Sectors (CEBS) and the European insurance committee CEIOPS to take account of barriers to harmonisation of national control rules and practices. The three committees were instructed to work more closely together on 1) establishing a mediation mechanism to be tested out in 2006 for real estate and in 2008 for banking and insurance; 2) drawing up guidelines before the end of next year to encourage delegation; and 3) drawing up common formats before the end of next year for financial reporting requirements and examining before the end of 2008 how electronic data can be shared. The ministers are eagerly awaiting the FSC's examination of the Lamfalussy framework for 2006 and 2007. The Council agreed with the Commission's report that the segmented nature of retail markets is an obstacle to cross-border consolidation and backed the proposed remedies, including the draft directive on payments and consumer credit. The European Commission will publish a White Paper next year on mortgage lending.